By Michael Mahoney E-Commerce Times
03/08/01 4:43 PM PT
In October, Idealab! announced that it was postponing its IPO due to a
volatile marketplace and lowered investor demand for Internet stocks.
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Idealab!, the dot-com incubator behind eToys,
CarsDirect and Petsmart.com, said
Wednesday that it is moving some of its Silicon Valley functions
to the company's Pasadena, California headquarters. The
move may result in a number of job cuts over the next few months.
"Wherever possible, Idealab! Silicon Valley's 33 employees will be given the
opportunity to transition their employment to one of the operating
companies," company spokesperson Teresa Bridwell
told the E-Commerce Times. However, those employees are not being given pink slips as yet.
Although it is relocating all of
its West Coast new-company development to
one place, Idealab! is not closing the Northern
California office . That office will continue to
support the activities of Airwave, Mybiz and eLease,
the three companies that currently
operate out of the firm's Palo Alto facilities.
Writing on the Wall
In addition to the Pasadena hub, the five-year-old company has
network offices in New York, Boston, Massachusetts and
London. In total there are approximately 50 businesses in
various stages of development with Idealab!.
No other offices outside the Silicon Valley will be affected, Bridwell said.
Though Idealab! would not comment on the reasons for the consolidation
at this time, the privately held company has sent up various
smoke signals indicating that the dot-com downturn has taken its toll.
Rough Times
In October, Idealab! announced that its initial
public offering (IPO) plans were being postponed, due to a
volatile marketplace and decreased investor demand for Internet stocks. The
IPO was originally expected to raise approximately US$300 million.
In addition, eToys, one of the crown jewels of Idealab!, filed for bankruptcy
this week and is closing its doors.
Incubator Heat
During the boom years of 1997 to mid-2000, the number of Internet incubators --
firms that offer a hybrid of venture capitalism and business consulting --
grew from 24 to 213.
However, the harsh market for e-commerce
companies has hit incubators as well as e-tailers in recent months.
For example, CMGI (Nasdaq: CMGI), once one of the Internet's
high-fliers, reported a $636.6 million third-quarter loss at the
end of 2000.
Stock Tales
In addition, CMGI's wholly owned portal, AltaVista, recently
sold its Raging Bull Internet financial community to
competitor Terra Lycos (Nasdaq: TRLY) as part of an ongoing
corporate restructuring. In November, CMGI sold its
iCAST and 1stup subsidiaries.
CMGI, which has more than 70 dot-coms in its stable, closed up
50 cents at $4.78 Wednesday, far from its 52-week high of $151.50.
Likewise, e-commerce incubator Rare Medium Group (Nasdaq: RRRR) closed down 3 cents
at $1.97, compared to a 52-week high of $94.75.
. That office will continue to
support the activities of Airwave, Mybiz and eLease,
the three companies that currently
operate out of the firm's Palo Alto facilities.
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